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There seems to be a new buzz word used now. It is "exotic currency" As though this is something magical. I took the liberty to cut and past a couple of websites definitions and examples of exotic currencies to others will not be spellbound when they hear the term, I hope it helps.

from Investopedia: "Investopedia explains 'Exotic Currency' Exotics are not considered major currencies because they are not easily traded in a standard brokerage account. Major currencies include the U.S. dollar, Euro, Canadian dollar and Swiss franc. Examples of exotic currencies include the Thai baht, Uruguay peso or Iraqi dinari.

From Onanda :"

Exotic Currencies

We receive very few price points (one price point per week for some currencies) from our data suppliers for some emerging market currencies.

The following is a representative list of these exotic currencies. It is not necessarily complete.

You may see the message, "Estimated price based on daily US dollar rates." This message is displayed for currency pairs where relatively little data is available, and means that the exchange rate for the converted currencies was computed from cross rates with the US dollar.

Right now, the biggest opportunities by far are in the emerging market currencies (also known in the business as “exotic currencies”).

These are the currencies of countries like Poland, the Czech Republic, Thailand, South Korea and South Africa, to name just a few.

These countries are a generation or so behind the major developed economies like the. But they are growing much faster and making up for lost time with a vengeance.

Take Brazil for example. Just a few decades ago, the country was a mess. Brazil had very high unemployment rate, hyperinflation, political instability, you name it.

Today, Brazil has an all-time low unemployment rate, record consumer confidence, and an uncontested thriving economy.

Brazil is not alone. Many other emerging market nations are going through the same experience. What happened to them? They simply learned from their past mistakes.

During the 1990s, there was no better place to find economic turmoil than emerging markets. The Mexican peso crisis in 1994, the Asian crisis in 1997, and the Russian debt default in 1998 were some of that decade’s highlights.

Surviving a crisis is a harsh lesson for everyone involved. Naturally after enduring a crisis, most emerging markets wanted to ensure it never happened again. So leaders started making some serious reforms.

Today most emerging markets are collecting the fruits of those reforms. Most are sitting on piles of cash. That’s one of the reasons most emerging markets recovered so quickly from the recent global recession especially compared to the big developed nations like the U.S. and E.U.

In fact, this all creates volatile moves that you can exploit by trading foreign currencies in the $4 trillion spot market.

An Easy Way to Make a Killing, Shorting the Dollar

It’s also amazing how much money is flowing into these emerging markets. These capital flows are very important to currency traders because it practically guarantees these countries’ currencies will move quickly against the dollar.

They create very profitable trends for those who are trading in the spot market, especially when there’s a well defined trend in the dollar.

As a currency trader, you can simply pair these stronger emerging market or “exotic” currencies with the U.S. dollar for some decent gains.

During the last weak dollar trend in the summer of 2010, our editor Evaldo Albuquerque helped his Exotic FX Alert subscribers pair the weak dollar with the stronger Mexican peso and Polish zloty for gains of 46% and 108% (among others).

It’s a simple strategy. But it really is as easy as watching where the capital flows will head next and being ready to jump on these opportunities in the spot Forex market.

For more recent examples of emerging market trades, check out our research service, Exotic FX Alert. This service is designed to help you trade currencies from the emerging markets in the spot Forex market. You’ll receive timely recommendations, along with elite analysis on these “hard-to-reach” markets, videos and timely answers to your questions in monthly Q&A issues. To learn more, see Exotic FX Alert.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC Rule 4.41 – These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

It should not be assumed that the methods, techniques, or indicators presented in this product will be profitable or that they will not result in losses. Past results of any individual or trading strategy published by The Sovereign Society are not indicative of future returns by that individual or strategy, and are not indicative of future returns which could be realized by you. In addition, the indicators, strategies, columns, articles and all other features of The Sovereign Society’s products (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. "

nwrichard- An exotic currency would probably be the type that you would see in a bar in 'Jamaica Mahn'- You know, the money from another country that when they make their first dollar, or whatever, they always put it in a picture frame, and then hang it on the wall behind the counter that the 'till' sits on- {cash register}- :cheers:

Last edited by terbo56 on Wed Jul 25, 2012 7:23 pm; edited 1 time in total